Noriega: Carve-outs are the worst, but at least your iPhone is affordable-ish

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SALT LAKE CITY — I don’t know how we got to this point, but we’re gladly rolling down the carve-out hill.

The most recent example of this is China’s monstrous 145% tariff imposed by the Trump administration that was going to tank the Chinese economy and bring China to their knees begging to return to the good graces of the United States.

Then we saw that iPhones could surge to a breathtaking $2,300, and President Donald Trump announced a Chinese tariff exemption on electronics.

Whew, crisis averted. Now we only have to pay $1,600 for our new iPhone Pro Max.

We turn a blind eye to carve-outs because they benefit us, usually at the expense of others or other businesses.

It’s selfishness. We don’t want to pay extra for our already expensive iPhones, so we demand that they be exempt.

We don’t like paying taxes, so we get carve-outs for electricity production, mortgage interest and child tax credits. Here’s an NCAA Tournament-style bracket of 64 tax loopholes. Which one is your favorite?

Businesses look for three things, according to Salt Lake Chamber President and CEO Derek Miller. He said that businesses rely on three things: stability, certainty and predictability.

The ever-changing tariff landscape doesn’t allow any of these things to happen.

Trump claims that tariffs are good for American companies, right? Which American companies? Just the big companies or all companies? The tariff exemption benefits trillion-dollar Apple, but does it benefit the mom-and-pop businesses in America? Small businesses don’t have the power or influence to negotiate carve-outs. They pay them.

Miller said, “Utah businesses, 99% of them are small businesses… so many of them are exporters.”

Shockingly, Utah is a top 10 exporting state in the nation, according to Miller.

My old college roommate, Mark Drennan, is the president of a local camping gear company called AceCamp. Tariffs could eat up their profit margin entirely. “It takes most of the products from being profitable to not profitable or barely profitable. We have to raise prices or we’re in real trouble.”

“I don’t know if it will put us out of business or not, we’re barely getting by as it is,” Drennan said. “If it sticks in the long term and everyone raises prices, then we can make it. If the big companies are able to shift their production elsewhere and I’m not, then I won’t be able to compete, and we’ll go out of business.”

That’s why carve-outs matter. It’s the NFL playing against the high school sophomore team. There’s no level playing field when huge companies bend the ears and wills of powerful politicians to their demands.

Oh, wait, the tariffs might be back on for iPhones. Everything is fine.

Whiplash yet?

Dave Noriega is the co-host of Dave & Dujanovic on KSL NewsRadio. Follow him on Facebook and X. 

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